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September 2, 2021
Written By DEVIKA SINGH
Pune-based Agarwal Business House, the largest franchisee of Crossword Bookstores, acquired the book retail chain from Shoppers Stop this week. It plans to expand the bookstore’s retail footprint and focus on the omnichannel play.
Crossword Bookstore In Panjim (PC: Wikimedia Commons)
Agarwal Business House (ABH) has set an ambitious growth plan for Crossword Bookstores it is acquiring from Shoppers Stop and is optimistic about turning around the loss-making venture despite concerns about the industry-wide decline in sale of books.
The company, while expanding the retail store chain to new geographies including tier-II cities, also plans to push higher from the digital channels.
However, the focus of its strategy to revive the loss-making venture is making it again a book-first brand, Akash Gupta, Managing Director – Agarwal Business House, said.
“The focus is going to be back on books and we are going to be a books-first brand catering to the real reader as that’s what consumers expect out of Crossword Bookstores,” he added.
The bookstore chain currently draws about 60 percent of its revenue from book sales and the rest from toys, stationeries, and other accessories. ABH plans to reduce the share of other categories to 30 percent in the next two years while increasing book sales.
ABH, a family-run business, is the largest Shoppers Stop franchise for Crossword Bookstores and operates 40 stores of the brand across the country, more than the parent company’s tally of 26. Including all other franchisees, Crossword Bookstores presently operated 70 stores.
“We have reached a size where we are even bigger than the company in terms of store count. Considering that we have been in this business for the last 20 years, and are passionately involved in the whole book trade, hence, it was a natural transition for us to acquire the brand and take it ahead,” said Gupta.
Founded in 1992 in Mumbai, Crossword Bookstores was acquired by the departmental store chain Shoppers Stop in 2005. The retail chain has been operating in red for a while now and its losses had been piling up year on year. According to the Shoppers Stop Annual report for FY21, the company reported a net loss of Rs 12.91 crore in the financial year 2021 (FY21) as compared to a net loss of Rs 12.45 crore in FY20. The pandemic further hit the business and the company had to close down 12 stores during the year. The sale of the business is part of Shoppers Stop’s strategy to focus on its core business.
The departmental store chain sold the business to ABH at a gross valuation of Rs 41.6 crore. Shoppers Stop will initially divest a 51 percent stake in the retail chain (expected to be completed within 15 days) and another 39 percent in the next 12 months.
The turnaround strategy
Despite Crossword Bookstores’ underperformance over the years which reflects the industry trend, ABH is confident of reviving the business within a year. The company has set out an ambitious chart for the retail chain going ahead which involves foraying into new geographies and building an omnichannel presence.
“We are confident that we will be profitable within a year given our experience of over 20 years in this segment,” said Gupta.
Its dismal performance in the last few years does not faze the new owner, who says “book stores require passion and entrepreneurial structure and cannot be run out of a corporate structure”.
“The most important thing is that it requires people who are passionate about books,” he adds.
Gupta claims that the 40 stores run by them as a franchisee were profitable at EBITA level (earnings before interest, taxes and amortization) as well at the net profit level, and hence, they have the expertise to revive the sinking ship.
Under this strategy, ABH plans to launch about 20-30 stores this year, half of which will be in its current locations while the rest are in tier-II cities. The company will launch these stores in its three formats – flagships stores, brand stores, and express format which are smaller stores of 1,000 square feet.
As part of its digital initiatives, the company plans to increase sales from e-commerce which currently contributes 5 percent to its business.
“We are targeting 10-15 percent from the digital channel in a couple of years,” Gupta said.
The company plans to “build a truly omnichannel experience” for readers.
“Whether consumers visit our store, our website or app, they should get the same Crosswords Bookstores experience,” said Gupta.
Riding into headwinds
Although ABH is optimistic about the newly acquired business, experts said odds were stacked against the company, given the industry-wide trend.
“There are two big trends in the industry. Book reading culture has declined very rapidly as people spend more time on screens. While the number of publishers and books being published has risen in India of late, the business has also moved to the online channel,” said Devangshu Dutta, founder and CEO of Delhi-based retail consultancy Third Eyesight.
Owing to these two trends, the sale of books has declined in recent years. Even large corporations such as Reliance Industries and Future Group tried their hands at the book business but exited quickly. Reliance Industries had introduced its chain of bookstores TimeOut in 2008 but eventually closed down the stores. Future Group, similarly, had experimented with Depot.
Gupta, however, stresses that these businesses failed because of the corporate structure, and a more ‘ hands-on approach’ is needed for books. He cites recent Nielsen data to prove his point about increasing readership.
A survey by Nielsen Book India conducted just after the lockdown was lifted last year showed consumers were spending more time reading books. Both reading and audiobook listening were up, increasing by a substantial seven hours weekly on average to as much as 16 hours per week, according to the survey report.
Dutta agrees. “To make a success out of this business, a brand has to become an authoritative source on the books for the customers. It is about what it can add to the customer experience besides selling books,” he said.
Salespeople, Dutta said, were an important part of this journey and have to be knowledgeable about the books as it is a very “involved purchase”.
Source: moneycontrol
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August 24, 2021
Written By ET Now Digital
The app will also be integrated with Facebook-owned WhatsApp on the lines of WeChat—China’s most popular social commerce platform which has more than 1 billion users–according to sources.
New Delhi: Mukesh Ambani-owned Reliance Industries is reportedly planning to creating a super app by integrating the offerings of local search engine Just Dial, which it had acquired recently, as it aims to be the number one player in the ecommerce space.
Currently, it offers Jiomart for online grocery retail and mobile apllication App, My Jio and the one stop super app is likely to be a marketplace of services and offerings, delivered via in-house technology and through third-party integrations, the Economic Times mentioned in a report citing executives. The final contours of the product are being sharpened and will be launched as soon as the government announces clarity on the ecommerce policy, the people cited above told the publication.
Reliance Retail Ventures Ltd (RRVL) acquired a majority stake in JustDial for Rs 3,497 crore last month.
The app will also be integrated with Facebook-owned WhatsApp on the lines of WeChat—China’s most popular social commerce platform which has more than 1 billion users–they said.
Executives close to Reliance Industries said the conglomerate has been clear that it has to reach consumers for every possible requirement in the products and services space. “Super app is just a fancy term. Whatever one calls it, it is about touching consumers and meeting their every single requirement, ” the publication quoted an unnamed executive as saying. “Nothing is done adhoc in terms of planning or strategy to access consumers. Jio had begun the journey years back with telecom and is now scaling it up and tapping every route that accesses consumers.”
Another executive told ET, “The directive is clear that Reliance should be the number one player in the ecommerce space and acquisitions and partnerships have been long planned to achieve that. We are investing accordingly.”
Top executives close to the development said Reliance is pumping in several thousand crores of rupees into its ecommerce strategy with a clear directive to pre-empt competition and be a No.1 player in the space, which is currently dominated by Amazon and Walmart-owned Flipkart.
In July 2020, Chinese super-app WeChat officially stopped operations in India after being banned by the country over privacy fears.
“Reliance has been aggressive with growth of communications and retail businesses, and their partnerships and acquisitions are consistent with the move to build the overarching bridge presence of the dominant super app,” the financial daily quoted as saying Devangshu Dutta, consulting firm Third Eyesight’s chief executive.
Mukesh Ambani-controlled Reliance Industries has been able to attract some of the best global companies as strategic partners. Facebook and Google have bought strategic stake in Jio Platforms and the company has collaboration with Microsoft on SME offerings and cloud. Apart from being a cellular entity, Reliance has built more than 20 consumer apps under its umbrella app MyJio.
“While the app acts as an access point to other Jio apps, it is predominantly used mainly for recharges. In our view, the app does not yet have a strong value proposition that every customer would use. Overtime, if two to three of these apps gain traction, then RIL has a potential of creating a similar impact that of a super app,” said a recent report by BofA Securities. “However, the traction would be similar to that shown by Google in the US – where apps like YouTube, Google Maps, Gmail, etc. are standalone apps.”
However, the report said none of the Indian tech companies are currently at the point where China and ASEAN apps are in the super app journey, and that Indian companies are still some time away – both from customer value proposition as well as the MOAT in the fiercely competitive Indian market.
Ambani had recently also announced a set of integrations between WhatsApp and JioMart on a trial basis. “Our joint teams are actively developing the full new commerce solution, linking merchants and consumers, and we plan to progressively launch these over the next few quarters,” he had said.
Source: timesnownews
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August 6, 2021
Written By Upmanyu Trivedi And Saritha Rai
The two behemoths, owned by two of the world’s richest men, Jeff Bezos and Mukesh Ambani, are fighting for a bigger slice of the Indian market.
Supreme Court said Reliance cannot go ahead with a $3.4 billion deal to buy Future Group’s retail assets.
Mukesh Ambani’s planned $3.4 billion purchase of an indebted retailer suffered a blow after Amazon.com Inc. won a court battle to halt the transaction, disrupting the tycoon’s ambitions to take on the US e-commerce giant in the $1 trillion local market.
On Friday, a two-judge bench of Supreme Court ruled that an emergency order by a Singapore arbitrator last year, which stopped Reliance from proceeding with the deal, is legally binding. Amazon had approached the arbitration court, and the parties will now have to wait for the deliberations of that body before a final decision.
The court’s verdict is the latest episode in a bitter battle over the cash-starved Future Retail Ltd. — the nation’s second-largest supermarket chain — which both Jeff Bezos-founded Amazon and Mr Ambani’s Reliance Industries Ltd. want to control. The two behemoths, owned by two of the world’s richest men, are fighting for a bigger slice of the only billion-people plus consumer market that’s still open to foreign firms.
Reliance dropped as much as 2.6% in Mumbai on the ruling, the biggest intraday decline in two weeks. Future Retail plunged by its daily limit of 10%, the most in more than four months.
Reliance shares dropped as much as 2.6% in Mumbai after the ruling today.
For Seattle-based Amazon, adding Future’s Big Bazaar brand of stores to its assets would help expand its brick-and-mortar footprint across the country. Mr Ambani announced his plans to buy Future’s assets almost a year ago to help aid his retail push. His oil-refining conglomerate has identified e-commerce and conventional retail as two focus areas, and roped in investors including Facebook Inc. and Alphabet Inc.’s Google in 2020.
“The court verdict puts a speed breaker on Reliance’s retail dominance in India,” said Devangshu Dutta, founder and chief executive officer of the Delhi-based retail consultancy, Third Eyesight. “It balances the competition with the larger American players, and gives Amazon a much-needed presence in physical retail.”
Future Retail’s 5.60% $500 million January 2025 notes plunged 5.7 cents on the dollar to 66.3 as of 2:45 p.m. in Hong Kong. That’s the lowest level since Aug. 27, according to data compiled by Bloomberg.
The feud highlights the importance of the Indian consumer market. Amazon has pledged $6.5 billion of investment, while Walmart Inc.-owned Flipkart recently mopped up $3.6 billion in the country’s largest fundraising at a valuation of nearly $38 billion.
Amazon owns a stake in an unlisted Future unit and has argued that it contractually has the first right of refusal to buy Future. It went to the Singapore arbitration court last year, accusing the Indian retailer of Future Group of violating that contract when it agreed to sell its wholesale, warehousing, logistics and other retail assets to Mr Ambani’s conglomerate.
Source: ndtv
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July 15, 2021
Written By Nabeel A Khan
India’s super-luxury car (priced above INR 2 crore) sales have apparently been on a growth trajectory for the past few years. The niche segment grew more than three fold from about 150 cars in 2018 to about 500 cars in 2020. But the overall volume of the segment remains too low to be significant. Though India is one of the countries having the highest number of millionaires in the world, it doesn’t figure among the top 25 markets for such cars in the world.
New Delhi: In the number of billionaires India is placed third in the world. It has over 7.3 lakh millionaires also. In the global ranking of high net worth individuals India is thirteenth. But this opulence is not reflected in the market for the super-luxury items as a whole and luxury cars (priced around INR 2 crore) in particular. The luxury car market in India has apparently been growing year on year. But the sales volumes are so low that India is not among the top 25 markets for such cars globally.
Sharad Agarwal, head, Lamborghini India
However, India is the world’s fourth-largest passenger car and the largest two-wheeler market. But the market for the super-luxury cars is abysmally low at around 500 units a year. Sharad Agarwal, the segment, despite all the growth in the past few years, had a peak volume of 265 units in CY 2019 which further sank by 30% in CY 2020. For Lamborghini, the peak annual sales volume remained at 52 cars in 2019, which is not even 1% of its global volumes, and declined still further in 2020.
According to Lamborghini India head
Experts say that the performance of other super-luxury products also does not resonate with the number of the ultra-rich citizens in the country. The one big reason for this anomaly is that most of them prefer shopping overseas, especially in Europe, Dubai, and the US~
The biggest challenge, however, is that India has one of the highest tax rates on these super-luxury cars at around 400% on the cost of the vehicle at the time of import. The taxes are the highest as almost none of these super luxury cars are assembled or manufactured in India. They attract about 110% import duty and an additional cost on homologation. Most often these manufacturers assert that the tiny volume doesn’t make business sense to invest in local assembly or manufacturing.
“For us, the overall tax is about 430% on the import cost of the vehicles which is one of the highest in the world,” says Sharad Aggarwal.
For example, the Mercedes AMG- C-360 coupe has an estimated import cost of INR 45 lakh and after all taxes, it costs about INR 1.7 crore for the end-buyers in the country.
Similarly, for Porsche Panamera, the estimated import cost is about INR 52 lakh to INR 55 lakh but it costs about INR 2 crore to the buyers after all taxes. The price doesn’t include the mandatory insurance cost which is also substantially high.
“With the rationalisation of import duties for such high-end cars, we expect the top-end luxury segment to grow even faster and the industry can widen the current customer base. In order to grow this segment Mercedes-Benz decided to localise the AMG portfolio and has now introduced 3 new models which are available at below the INR 1 crore price bracket. This we expect will further increase the demand for such performance cars in India,” Santosh Iyer, vice president – sales and marketing, Mercedes-Benz India, said. He adds that the segment’s volume surged three-fold from about 150 units in 2019 to about 500 units in 2020.
An interesting trend is that more and more customers in the 40-45 age groups are opting for the high-end Mercedes and AMG products. They are mainly super-rich second-generation businessmen, who are well-traveled, luxury dwellers and have experienced these ultra-luxurious cars and products abroad~
Audi India has a similar optimistic view of the market. About the customer trends, Balbir Singh Dhillon, head of Audi India, said, “There has been a shift in consumer expectations – today, buyers want a degree of personalization in the luxury segment and we, not only offer that but also offer these buyers a host of digitization initiatives that allow them to view and customize their favourite Audi from the comfort of their homes. Along with our dealer partners, we are providing customers a seamless experience.”
Lamborghini has relatively younger customers with most of them falling in the age group of 25-45 and many of them are kids of businessmen and a few of them are new generation entrepreneurs.
Other super-luxury car brands that operate in India in this price category are — Rolls Royce, JLR, Maserati, Aston Martin, and Bentley.
In 2019, Rolls Royce said that it sold 5,152 units, claiming that this was the British car manufacturer’s highest sales in its 116-year history. However, the company retailed only one car last month.
BMW India, another German luxury carmaker, did not respond to or share information sought for earlier stories in the recent past. Therefore, we did not reach out to them to participate in this story. BMW has turned conservative in sharing sales and other information with ETAuto after its volumes declined a few years ago.
Source: auto.economictimes.indiatimes.com
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June 29, 2021
Devika Singh, Moneycontrol
29 June 2021
Post-COVID, the sanitiser market will shrink considerably and there will be room only for old trusted brands or bulk low margin suppliers, suggest experts.
Every one in two urban households are now using sanitisers, as per data from Kantar.
The pandemic has triggered a gold rush in the health and hygiene sector, particularly sanitisers – even if temporarily.
A severely underpenetrated category in the pre-pandemic period, sanitisers have witnessed massive adoption amongst the consumers since March 2020.
According to data from Kantar, annually, before the pandemic struck (March 2019 – February 2020) hand sanitiser penetration was about 1.2 percent; on an average in a month only 0.1 percent of the urban households bought the product.
However, during the first 12 months of the pandemic, the category reached nearly 50 percent penetration, a quantum leap.
It means everyone in two urban households are now using sanitisers, as per data from Kantar, the world’s leading data, insights, and consulting company.
Overall, the hygiene category had witnessed a huge spike in sales as the first wave of the COVID-19 pandemic struck the country in March last year.
Although the sales declined as the cases subsided, the demand jumped up again with the second wave of the pandemic.
Several companies had made a beeline for the category and joined the sanitiser gold rush.
According to data from Kantar, as many as 350 brands of sanitisers were launched in the first three months of the pandemic.
Consumers are also buying more products in the hygiene category such as vegetable cleaners and surface disinfectants.
Data from Kantar shows that vegetable and fruit cleaners now have a penetration of 2 percent and surface disinfectants 1.5 percent.
“For a category that is driven by a limited number of brands and has not even been there for a year, it is a huge success,” said K Ramakrishnan, MD – South Asia, Worldpanel Division, Kantar.
Though the category overall has seen an increase in demand, industry and experts expect only a few big brands with a strong legacy in the hygiene segment to sustain in the long run.
Hence companies such as Marico have already started deprioritising the category.
“Of late, we have realised that it (sanitisers) is more of a tactical opportunity for us to provide consumers what they needed then,” Pawan Agrawal, CFO, Marico, said.
“These products do not fit into our scheme of things as we understood that consumers will go back to the legacy brands with strong equity in hygiene, and hence three-four brands will have a larger play in the segment,” he added.
Marico, hence, has decided to not make any fresh investments in the category going ahead.
Raymond Consumer Care, which sells sanitisers under its brand Park Avenue, too, has similar plans.
“We believe post-COVID, the sanitiser market will shrink considerably and there will be room only for old trusted brands or bulk low margin suppliers. Given this context, we will maintain strategic presence in the chemist channel, but this segment will not be a priority,” admitted Sudhir Langer, CEO – Raymond Consumer Care.
Other companies such as CavinKare plan to focus on flagship products such as handwashes.
Said Raja Varatharaju, GM Marketing – Personal Care, CavinKare: “As the demand for sanitisers continues to slow down, our core focus will remain on offering a bouquet of products under the health and hygiene portfolio as we move forward. We will increase and strengthen our focus on hand wash, as it is a flagship product in our portfolio.”
Reckitt’s Dettol, ITCs’ Savlon and Hindustan Unilever Limited’s (HUL) Lifebuoy are some of the top brands in the health and hygiene space, which are likely to benefit from this trend in the long run, indicate experts.
Consumers associate certain products and categories with certain brands and are inclined to buy from them, said Devangshu Dutta, Chief Executive at retail consultancy, Third Eyesight.
Hence, companies, which saw in the pandemic the chance to tap the short-term opportunity, do not want to focus on it any longer.
Source: moneycontrol
